Maybank Investment Banking Group (Maybank IBG) expects office rents to remain under pressure with lower occupancy rates and tenants favouring newer and sustainable buildings.

According to its MY Credit Outlook 2022 – Chartbook and Views report, property developers’ credit metrics remained strong overall, and the impact of Cukai Makmur should be minimal because projects are developed under different entities.

Tropicana Corporation Bhd is viewed with caution due to increased leverage and a slow recovery for property investments. Eco World Development Group Bhd is preferred over Mah Sing Group Bhd.

“We think IOI Properties Group Bhd (IOIPG) (AA/negative) should be able to keep its current rating as strong profitability, solid liquidity and financial flexibility help moderate potential higher leverage, and if IOIPG commits to a plan to deleverage and restore credit metrics to levels that commensurate with AA rating,” it said.

Maybank IBG believes that sustained economic reopening and gradual easing of international borders will help the retail sector recover.

The mall occupancy rate appeared to have bottomed out, with early signs of stabilisation, it said.

Source: New Straits Times, January, 2022